Burn it all down
There are no bailouts and no interventions. Bitcoin just is. And now it's going to absorb the collapse of large parts of "crypto".
“Every step which leads from capitalism toward planning is necessarily a step nearer to absolutism and dictatorship.” - Ludwig von Mises
Now that the Bitcoin and crypto bullrun is officially over and the long and cold winter awaits, the bears come out to feast. I’m not going to waste anyones time by pointing out all the perma haters who are taking victory laps right now. Just go on Twitter and see for yourself.
As someone said today: Bitcoin is so volatile, everyone will be right at some point. Ok.
But with their eyes glued to the price of Bitcoin, many are going to miss the forrest for the trees. For example: This is the only free market in the world right now. And even though it hurts right now if you bought Bitcoin (or god forbid crypto) as an investment, the sight is beautiful.
Let me explain…
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If you want an overview of all the crazy shit we’ve seen in the last couple of months, this thread does a pretty decent job.
NFTs, food-themed-tokens, DeFi, Solana breaking down again and again…
Drnick also identifies the downfall of Terra/Luna/UST as the beginning of the end, and few will argue with this assessment. No, those Mfers were not the peg. Lol.
But here is the thing. Bitcoin is definitely not the Fed.
The Fed is in the business of manipulating the money supply and markets. Bitcoin is in the business of Bitcoin. It just is. It ticks along like a metronome.
Just look at what Bitcoin is absorbing right now.
The Fed (and other central banks) are raising rates. Currency is getting more expensive. Bitcoin now shows that it is liquid enough to be sold in such a scenario.
Even if it’s a long weekend and Wall Street is closed. I can’t stress how important this is.
Small retail investors wont immediately understand why the ability to sell is so important - but in order to be a serious player in the field of money, liquidity is probably the most important metric.
Deep liquidity means you can buy and sell whenever you like without causing too much slippage. Meaning you’re not going to ruin your own buy/sell price by buying or selling too quickly.
Now, Bitcoin certainly isn’t as liquid as Gold or Treasuries. But those markets don’t trade 24/7/365. This factor alone puts Bitcoin on the map.
Yes: It is a good thing that Bitcoin can be sold quickly.
This is actually one of the reasons why altcoins haven’t completely tanked (yet). They are just not liquid enough to be sold in a moment of stress.
So Bitcoin is absorbing the Fed pivot.
It is absorbing the selling
It is absorbing the collapse of one crypto crap thingy after the other: Luna, Celsius, 3AC - and that’s just the big ones. I suspect shitcoin scams to collapse left right and center for the foreseeable future.
But Bitcoin is absorbing it.
And now for the most important part:
Noone is stepping in!
There is not going to be a bailout.
The market just gets to do what it does best. It gets to relentlessly purge all the shit from the system.
And it does so in a swift way exactly because there is no bailout, no emergency lending program, no secret meetings at the NY Fed, no phone calls to Warren Buffett, no TARP, no QE, no nothing.
In a way this collapse just goes to show how stupid the argument is that the state (in the form of the central bank) needs to “step in” if there is a correction.
These interventions just lead to the next crisis that needs to be fixed. And so on and so on. Just look at the inflation caused by the “fix” for the pandemic lockdowns.
So yeah, we have to stomach this. It’s another test for Bitcoin.
Mfer we are not the Fed.
Now, in the words of the brilliant Caitlin Long talking about “crypto” scams:
Until next time!